Amazon.com launches video-streaming service

The move positions Amazon to be the first serious challenger to Netflix. Amazon has fewer and older films and TV shows than its fast-growing rival but is in talks with Hollywood studios to expand and freshen its offerings.

Amazon.com Inc. has launched its long-awaited subscription video-streaming service, positioning itself as the first serious rival to fast-growing Netflix Inc.

The online retail giant on Tuesday began offering U.S. subscribers to its $79-per-year Amazon Prime unlimited shipping service access to 5,000 movies and television shows that can be streamed at no additional cost on computers and certain Internet-connected devices such as televisions.

Amazon has signed up two Hollywood studios, Sony Pictures and Warner Bros., to provide older movies from their libraries, along with 13 independent providers, including the BBC, PBS, Magnolia Pictures, IFC and National Geographic.

The eclectic mix of videos includes the movies "Hairspray," "The Human Centipede" and "Stripes" and the TV shows "Mister Rogers' Neighborhood," "Bonanza" and "Farscape."

Amazon's offering is only a fraction of the content available to subscribers of Netflix, which has deals with every major film studio and a number of TV producers. Moreover, whereas most of Amazon Prime's content is more than 7 years old, Netflix has much fresher titles. Some of Netflix's movies available to stream are less than a year old, thanks to agreements with the pay cable networks Starz and Epix.

Amazon, however, is in talks with every Hollywood studio to add more and newer content, people familiar with the matter said.

"Today is just Day One, and we're absolutely looking to build the catalog over time," said Cameron James, Amazon's director of online video offering.

He declined to discuss whether Amazon will get into the high-cost business of bidding against Netflix for recently released movies during the time when they have traditionally run on pay TV channels.

The company first decided to get into the subscription video business last summer as a way to take on Netflix, which has attracted 20 million subscribers, more than two-thirds of whom have streamed movies and TV shows from the Internet.

Kiosk DVD rental company Redbox Automated Retail has also said it plans to launch a subscription video-streaming service but with the help of a partner. Amazon is considered a likely candidate to be Redbox's partner.

Amazon already offers more than 90,000 movies and TV shows for rental or purchase on a non-subscription basis. It also recently acquired 100% of Lovefilm International, a European company that, like Netflix, offers DVDs by mail and videos online to subscribers.

James said there were no plans yet to integrate Amazon's U.S. subscription video service with Lovefilm.